Linking Crisis Management and Leadership Competencies

The first boss from whom I learned enormous amounts (namecheck: Jamie McLean, thank you) taught me that if you want to do something well, work backwards. Decide what you need something to be/do/achieve so you can produce an output spec. Then work out what’s needed to achieve the spec. Sounds simple, right, but so many people do it the other way around (as any business continuity planners will appreciate: how many times have you explained to people that if they START by writing the plan they will generally write the wrong plan for the wrong things). Anyway, this is my intro to telling you I found this great article, the title of which I’ve nicked for this post.

You see, I’ve written up the section on features of a resilient organisation, how the standards available do and don’t help, and now I’m explaining what leaders need in order to build resilience in their organisation. And it seems to me that one should look at what they’d need to be able to do in a crisis, and work backwards to ensure they are equipped with those skills, but also with the ability to minimise or avoid the issue before it becomes a crisis. And this article is very helpful.

As always, I can’t steal the article and repost it here, because it doesn’t belong to me. But I can share the abstract, offer up a few quotes that I think might help, and give you a link to the article itself. So the abstract is to the left, and your quotes are here:

“Organizational crises are described as low-probability and high-consequence events and are generally characterized by ambiguity” (Wooten & James, 2008)

“Organizational agility. Crisis leaders who are competent in organizational agility have a thorough knowledge of all aspects of the business and can work across organizational functions, departments, or silos to accomplish a task. In preparing or planning for a crisis, the ability to be organizationally agile is critical because although a crisis event may initially affect one aspect of the business, ultimately the entire organization, including its reputation, may be at stake. Crisis preparation and prevention must consider the organization in its entirety. Moreover, to the extent that a crisis leader understands all aspects of the organization and is able to span organizational boundaries to get things done, the more comprehensive a crisis plan is likely to be.” (Wooten & James, 2008)

“In addition to brainstorming about potential types of crises a firm may be vulnerable to, the most competent crisis leaders will identify full-fledged scenarios of possible events. Those scenarios then would be used as the foundation for preparing the organization for how to respond should an actual crisis occur by allowing decision makers to experiment with possible actions and hypothetical consequences (Chermack, 2003). Also, scenario planning for a crisis helps leaders create cognitive maps that provide a reference point and increase one’s ability to navigate unfamiliar terrain (Weick, 1990). Unfortunately, we found little evidence of the firms in our sample having displayed creativity during the preparation and planning stage. In fact, it was the antithesis of creativity that we observed in some firms that led us to identify creativity as an important competency” (Wooten & James, 2008)

“Second, there is a need to develop training programs that expose managers to the skills needed during the damage control phase of a crisis. The leadership competencies required of executives in times of relative calm are fairly distinct from the skill set required to effectively manage a crisis” (Wooten & James, 2008)

Given your focus on the appropriateness of people for Gold command, I was interested in your view on the following questions about Klein’s article.

To what extent is the current “Operational Continuity” situation attributable to the skills and experience of the people undertaking the work. Generally practitioners are not Executives, and too many BC folk have limited access to their Execs.
Irregardless of definitions and scope, these folks are unlikely to be engaged in strategic and market risk areas.

Conversely, if we are to embrace these areas (which I think is appropriate) surely we are going to need a new breed of BC folks, with Executive credibility.

Does this imply a two-tier profession? It seems to work for Accountants and Bookkeepers, and perhaps similarly for Doctors and Nurses.

Hi Ken, might you be the Ken from NSW? If I may, I’m going to step out of the academic mode and answer this with personal opinion, otherwise I may never get around to responding!

Operational continuity v skills and experience – my personal experience says yes, along with a massive dose of the right attitude, and increased by great working relationships with the others in similar posts. That’s not completely unjustifiable academically either: Amy Stephenson’s PhD thesis notes Mallack’s and Paton’s research studies that look into links between individual resilience and organisational resilience. If you want to follow it up you can find Amy’s thesis here (reference to studies on page 50 (which is page 64 of the PDF): http://www.resorgs.org.nz/pubs/THESIS_BENCHMARKING%20THE%20RESILIENCE%20OF%20ORGANISATIONS.pdf

In terms of execs, I have to say I have personally been extremely lucky. As a practitioner, I had access to the execs, briefed and trained the right people for Gold and, thank goodness, our default Incident Commander and Gold Commander were quite brilliant. However, that was down to my most recent boss’s skills in getting them engaged and it did take us four or five years to manoeuvre our team into that privileged position. So maybe it’s not luck at all; just a genuine motivation for company longevity (we’ll come back to that) that meant we kept at it until we got there. I have to say that, personally, I might not accept a position that required me to have Gold/the Exec engaged if I didn’t have high confidence that at least one of the Board was going to champion the cause when I asked them to. That for me, is the key to being able to make the manoeuvring work. But I appreciate that’s not a stance everyone would be able to run with.

However, for Resilience – which I see as all encompassing functioning for organisational longevity, of which bus con and crisis management are just a set of cogs – I think I’m starting to form the opinion that perhaps there are individual characteristics that make them more likely to ‘breed resilience’ in the company. I’m going to see if I can ‘test’ these in my primary research (which is tricky!). Characteristics that may enhance organisational resilience capabilities in leaders – by whom I mean anyone with a board position – include:
– a thorough understanding of the company (not just your own domain, but the company)
– long term tenure, along with long term tenure plans
– a personal motivation for the company to survive for at least 20 years beyond an individual’s leaving date.
– a reason for leading with THAT company that isn’t about money (higher purpose)
And of course these leaders for resilience, as board members, are also the likely top candidates for Gold.
But I haven’t put my thoughts out for testing yet, so we shall see!

As for does it imply a two-tier profession, I am going to argue no, though I know it is like that for many at the current time. But consider, for example, finance within an organisation. The finance function is likely to be a mix of accountants, strategists, administrators, project manager, treasury experts, and so on, but they funnel up to a CFO (usually). I wonder if I might end up arguing that some of the key ‘resilience contributing’ areas – which at the moment I see as corporate strategy, physical and information security, procurement/supply chain, technology, risk management (with a strategic hat on), business continuity, finance, HR, and crisis management – should be under one board rep, probably the COO or equivalent. (My very first boss, Jamie (again!) used to call this kind of function ‘the boiler room’ of the organisation.) I’m not the first to suggest this by any means, but I have secret tantrums about people renaming bus con functions as ‘resilience’!

And I reserve the right to change my mind on any of this as I keep writing – it’s a moving feast as I put things together.

Interesting, so let me engage you further in a hybrid of academic and practice. A model that will hopefully gain some traction in this space.

If we did a survey, or looked at results of various completed surveys, I suggest we would find that your experience (with respect to Executive exposure and engagement) was not the norm. As you note, probably attributable to the role played by your manager – and that tells me that he had credibility with Executive.

That made he, and his team, more effective in building a BC or CM capability.

I think we agree that the concept of resilience goes broader than traditional BCM and it close relations.

But I would challenge at least one of your prescriptions for resilient leadership, specifically the one around long tenure. In fact it could be argued that this may reduce resilience.

With respect to the “2 tier profession”, it was the idea that we will need different skills and experience to achieve different outcomes. We will need deeper skills in some aspects and wider perspectives and understanding in other areas. The broad knowledge of the organization you allude to.

Convergence of disciplines and an ” engine room silo” probably will not achieve that.

You appear to have adapted a definition of resilience from the work of Comfort, Boin and Demchak – so let me express the challenge in the terms they use at the start of their book, the similar sentiment that Hamel and Valikangas start from.

Risks and threats are emerging in new and unexpected ways – the world is becoming more uncertain. Current wisdom about mitigation and reduction is not adequately addressing this emerging need.

We are looking for a new answer, perhaps defined via the concept of resilience.

So, hypothetically, if we had a Doctor and a Nurse role for resilience, risk or BCM – how might we differentiate those roles?

Sorry, perhaps one should research if all these unisex names are making us less resilient?

To your point, I am not convinced on causality (long tenure to resilience). I think there is perhaps an intervening variable in the family owned business example. That being the culture of public listing, capital markets and analysts.

There is a short-term fiscal performance expectation for public listed coys, perhaps that just makes them less resilient, rather than the other way around.

I agree with your point about the need to take the long view for resilience, just not buying that long tenure equates to taking the long view.

p.s. “It then follows that strategic risk taking, because of its reliance on idiosyncratic and tacit knowledge of the TMT, the firm, and the environment, might necessitate executive experience gained via long tenure.
Short-tenured CEOs may lack sufficient awareness to effectively notice and assess strategic risks. They are also unknown, untested, and lacking legitimacy, which might limit their performance in execution. Thus, short-tenured CEOs’ efforts to spur TMT risk taking may be less than optimal, even if they willingly embrace strategic risks. Long-tenured CEOs, however, accumulate a track record, attain a deeper knowledge of the firm’s environment, and acquire firm- and job specific skills. Moreover, a long tenure reflects the extent to which the CEO has been integrated into the networks of key stakeholders and establishes the resources and coalitions that enable the CEO to orchestrate, nurture, and support risky initiatives. With longer tenure, CEOs are also likely to have been involved in more strategic risk situations and can be expected to better manipulate the TMT in strategic risk taking.” (Simsek, 2007)

I haven’t read that article, and I don’t have access to that journal, so you have me at a disadvantage. But I did find the abstract.

“While CEO job tenure is seen as influencing firm performance, the intervening mechanisms that govern this influence have remained largely unexplored. Given that individuals in the firm most closely influenced by the CEO are members of the top management team (TMT), we focus on the CEO-TMT interface as one important intervening mechanism. Specifically, our tested model suggests that CEO tenure indirectly influences performance through its direct influences on TMT risk-taking propensity and the firm’s pursuit of entrepreneurial initiatives.”

Doesn’t this support the idea of intervening variables rather than long tenure? Again noting I have not read the article.

🙂 I think I’m going to take the easy way out and say that I think it would be interesting to see if there is any propensity for those with longer tenures to act more for resilience. If there was then I think you’d be right in advising me to conclude that it may be a casual link that requires more research. But it would be interesting link to note none-the-less. 🙂

[…] on her blog. My issue was that I did not see that one caused the other. You can read the discussion here, but the conversation brought to mind a story one of my Sociology lecturers often used to […]